How to find affordable health insurance

The cost of health insurance is a combination of monthly premiums and out-of-pocket costs when you use your coverage. The more you're willing to pay out of pocket for care, the lower those monthly rates will be. But not all healthcare needs can be predicted, so it's hard to guess how much you'll pay for care throughout the year.

That means the most inexpensive health insurance plans for monthly premiums are those with higher deductibles, coinsurance, and copayments. That makes shopping for affordable healthcare a balancing act between what you pay monthly and what you must pay if you need care. 

Fortunately, there are programs and plans to make affordable health insurance accessible.

Individual and Affordable Care Act (ACA) plans

Individual health plans are available in the ACA marketplace and outside the marketplace.

The ACA exchanges are designed to help people find the most affordable health insurance plan available while ensuring basic coverage. The exchange plans must meet specified criteria, covering ten essential health benefits, including prescription drugs, outpatient, hospitalization, and mental health.

The federal government also offers low-income health insurance tax credits and subsidies. If your household income is between 100 and 400% of the federal poverty level, you are likely eligible for subsidies to make ACA health insurance cheaper. That’s about $12,880 to $51,520 for an individual and $26,500 to $106,000 for a family of four.

According to Dr. Kevin Griffith, an assistant professor at Vanderbilt University's Department of Health Policy, people too often fail to take advantage of this government assistance. "Many uninsured individuals are eligible for generous subsidies but either don't realize it or do not take advantage of them," he says.

You'll be asked to submit your household income information when shopping on the ACA exchange website. The tool provides subsidies where appropriate, so you’ll know what to expect to pay in premiums.

Expert Advice

Kevin Griffith

Kevin Griffith

Assistant Professor, Department of Health Policy, Vanderbilt University, Nashville, TN

“Many uninsured individuals are eligible for generous subsidies, but either don't realize it or do not take advantage of them.”

The ACA marketplace classifies plans by metal tiers:

  • Bronze
  • Silver
  • Gold
  • Platinum

The most affordable health insurance in the ACA marketplace in terms of premiums are Bronze plans, except for catastrophic plans, discussed below.

These have the lowest premiums but the highest deductibles and out-of-pocket costs. A Bronze plan generally costs less initially but requires more out-of-pocket expenses than the other plans for healthcare services. According to the Kaiser Family Foundation (KFF), the lowest-cost Bronze plan in 2023 averages $342 a month.

Platinum plans have the highest premiums but the lowest out-of-pocket costs and deductibles.

Silver plans typically have higher premiums than Bronze. However, if you qualify for subsidies, you may find a Silver plan that's cheaper than a Bronze plan. A Silver plan has lower out-of-pocket costs than a Bronze plan. So, a Silver plan might be a better bet if you qualify for subsidies. The KFF reports an average monthly cost of $448 a month for the lowest-cost Silver plan.

However, if you don't qualify for subsidies, ACA plans can be more expensive than an employer-sponsored plan. In that case, you may want to look for an individual plan outside of the marketplace. Plans outside of the exchanges don't have as many requirements and can be more affordable than ACA plans.

You can look for an individual plan outside of the exchanges by checking with an independent health insurance broker or going directly to area health insurers.

If you shop for a plan outside of the exchanges, check the coverage so you know what to expect before signing up.

To get an ACA plan:

  • Visit healthcare.gov, which is the ACA exchange’s website. The site asks you to enter information such as where you live and your family income. With that information, the tool provides health plan options and premium estimates.
  • Choose an HMO over a PPO. HMOs are cheaper but offer the same coverage. However, HMOs require referrals to see specialists, and you can only see doctors in the HMO's network.
  • A Bronze plan can be the better choice if you don't expect to need to see a doctor often over the next year.
  • If you qualify for subsidies, a Silver plan can wind up costing as little as a Bronze plan but has lower out-of-pocket costs.
  • If you can't find an affordable plan on the exchanges, check with individual health insurers in your area for options outside of the exchanges.

Catastrophic health plans

Catastrophic health insurance offers low-cost premiums with the comprehensive coverage found in standard health insurance. Catastrophic plans cover preventive care, pregnancy, mental health, prescription drugs, rehab, labs, and outpatient and inpatient care. These plans are limited to people under 30 or facing specific hardships such as homelessness.

Catastrophic plans are available through the Affordable Care Act marketplace. The plans have low premiums but high deductibles. The average monthly premium is only $195, much cheaper than other plans.

However, the deductible is around $8,000. You have to pay for healthcare services until you reach your deductible, at which point the plan pays for all your healthcare costs. Catastrophic health insurance doesn't have a coinsurance portion, which differs from many other plans.

To get a catastrophic health plan:

  • Visit your state's ACA marketplace. If you're under 30, catastrophic health insurance should appear as an option.
  • If you're facing a hardship, contact your state's marketplace directly and provide information.

Medicaid

Medicaid is a low-cost health insurance plan with the same benefits as an employer-sponsored health plan.

Depending on your income, you pay little to nothing for Medicaid if you're eligible. The combination of low costs and comprehensive benefits makes Medicaid an excellent, affordable health insurance choice for those who qualify.

Medicaid premiums are based on income, which varies by state. Thirty-eight states expanded Medicaid eligibility to up to 138% of the federal poverty level. That's $17,609 for an individual and $36,156 for a family of four. The other 12 states have stricter eligibility guidelines.

One drawback is that not all providers accept Medicaid, so you may encounter issues finding a doctor who accepts Medicaid.

To get Medicaid:

  • Check with your state's Medicaid program. The state program can figure out whether you're eligible and provide options.
  • States usually don't offer a choice for Medicaid. Instead, you enroll in the state Medicaid program or a managed Medicaid plan, which is a private insurer that contracts with the state.

Short-term health plans

Another cheap health insurance option for most Americans is a short-term health plan. You can likely find a short-term health plan for much lower premiums than an employer-sponsored or individual health plan.

Griffith cautions that you should look beyond price before choosing this kind of plan: "Short-term plans generally cost less than traditional insurance plans, but they are exempt from many of the ACA's consumer protections. Unlike traditional insurance plans, short-term plans do not need to cover pre-existing conditions, essential health benefits, and may have lifetime and annual benefit limits."

However, these plans aren't technically considered health insurance. They provide coverage for a short period and don't have the same level of benefits you usually find in a health insurance plan.

For instance, short-term health plans usually don't cover maternity, prescription drugs and mental healthcare. They also have annual coverage caps and you must pay all the costs once you reach it.

Short-term health plans are available for one year and most states let you renew them twice. California, Hawaii, Massachusetts, New Jersey and New York don't allow short-term plans. Colorado, Delaware, the District of Columbia, Illinois, Maryland, New Mexico, Vermont and Washington limit the plan's length.

Short-term health plans can help you in between jobs or until a new employer starts covering you. These plans aren't meant as long-term health coverage.

To find short-term health insurance:

  • A Google search provides you with insurers that offer short-term health plans.
  • Pore over the fine print to understand what the plan covers and what it doesn't.

Affordable health insurance from an employer

Most working-age Americans get their health insurance through an employer.

A benefit of employer-sponsored health insurance is that your job helps pay for coverage. The KFF estimates employers, on average, pay 83% of health insurance costs in a single plan, and the employee picks up 17%. On average, employers pay 72% of health plan costs in a family plan and employees absorb 28%.

The KFF reports that the average annual cost of health insurance through an employer in 2022 was $7,911 for single coverage and $22,463 for a family.

The downside of employer-sponsored plans is that you're limited to what your job offers and may only give you one option. Businesses increasingly look for ways to cut healthcare costs and one way is to limit health insurance to a single, high-deductible health plan.

High-deductible health plans (HDHPs) have a deductible of at least $1,400 for individuals and $2,800 for families by federal law. 

A deductible is the amount you pay for eligible healthcare services or medications before your insurance plan begins to share the cost.  Once you reach your deductible limit, the health plan begins to pay for healthcare after you pay for your coinsurance amount.

HDHPs are often the cheapest employer-sponsored health insurance plans in terms of premiums but have significant deductibles and out-of-pocket costs if you need healthcare services. They also come with health savings accounts (HSA) that allow you to put aside pre-tax dollars for later medical expenses.

To get employer-sponsored health insurance:

  • Check with your employer and spouse's employer to review health insurance offerings. You can sign up or make changes to your health insurance during open enrollment, or in case of an approved change in life circumstances. Open enrollment varies by employer.
  • You may want to consider a health maintenance organization (HMO) plan rather than a preferred provider organization (PPO) plan for a more affordable option. HMOs have lower premiums than PPOs and similar deductibles. One downside of HMOs is that they have restricted provider networks, so you can only see providers in that network. Plus, you must get referrals from your primary care provider to see specialists. However, that trade-off means you may pay half the premiums found in PPOs.
  • An HDHP could be a wise choice if you don't expect to need much healthcare over the next year. HDHPs have lower premiums but higher out-of-pocket costs than HMOs and PPOs. HDHPs also may have health savings accounts that let you save tax-free money for your healthcare. Find out more about the differences between health plans.
  • Check each plan's premiums, copays, deductibles and coinsurance, which is the percentage you'll pay for healthcare services once you reach your deductible. Those numbers give you an idea of which plan is most affordable for you.

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COBRA

Consolidated Omnibus Budget Reconciliation Act
People who lose their employer-sponsored health insurance may qualify for a COBRA plan. COBRA lets you keep your former employer's health plan, but you're responsible for paying all of the costs, including your former employer's portion.
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Medicare

People who are 65 and over qualify for Medicare. You can choose Original Medicare (also called Parts A and B), which is offered by the federal government, or Medicare Advantage (also called Part C), which private insurers provide. The average annual premium for Original Medicare is about $1,600. Medicare Advantage's average yearly premium is $336, but you may have higher out-of-pocket costs than Original Medicare.
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Medicaid

Low-income Americans qualify for Medicaid. Thirty-eight states expanded Medicaid eligibility, so lower-middle-class Americans may also be eligible in those states. Medicaid offers comprehensive benefits, but at little to no cost depending on your income. Each state has its own eligibility. Some states are flexible with Medicaid eligibility for people who are pregnant, a parent or disabled. If your household income is below 138% of the federal poverty level, you're likely eligible for Medicaid if you live in a Medicaid expansion state. That level is $17,609 for an individual, $23,791 for a family of two, $29,974 for a family of three and $36,156 for a family of four. Non-Medicare expansion states have stricter income guidelines. Check with your state's Medicaid program to see if you qualify.
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Parent's employer-based health insurance

The Affordable Care Act lets children stay on a parent's health plan until the age of 26. Having a child on a parent's health plan may or may not increase premiums. It depends on whether you already have family coverage when adding the child to the plan. If a parent already has family coverage, adding a child won't likely increase premiums. However, going from single or couple to family coverage could cause premiums to skyrocket. The average single coverage employer-sponsored plan premium is $1,186. The average family plan is $5,447.
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Spouse's employer-based health insurance

Most employers allow employees to add spouses to their health insurance. Going from single health coverage to a family plan may triple or quadruple your premiums. The average single coverage employer-sponsored plan premium is $1,186. The average family plan is $5,447. Not all jobs allow for spouse's coverage, so you'll want to check with your employer to make sure it's an option.
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Employer-based health insurance

Most people with private health insurance get their coverage through a job. employer-sponsored health insurance is usually cheaper than individual health insurance unless you qualify for Affordable Care Act subsidies. Job-based plans are generally less expensive because businesses often pick up more than half of employer-sponsored health insurance premiums. Kaiser Family Foundation estimates the average premiums for a single coverage employer-sponsored health plan is $1,186 and the average family plan is $5,447 annually.
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  • PPO
  • HMO
  • HDHP
  • EPO
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Employer plans are often one of these types of four plans. Click on each one to find out more.
  • PPO
  • HMO
  • HDHP
  • EPO

Preferred-provider Organization (PPOs)

  • Pay higher premiums with a lower deductible
  • You have access to more providers, but pay much more for health insurance
  • You don't want to choose a primary care physician
  • You don't want to get a referral
  • You want the ability to get out-of-network care
Preferred-provider organization (PPOs) plans are the most common type of employer-based health plan. PPOs have higher premiums than HMOs and HDHPs, but those added costs offer you flexibility. A PPO allows you to get care anywhere and without primary care provider referrals. You may have to pay more to get out-of-network care, but a PPO will pick up a portion of the costs.
Find out more about the differences between plans

Health maintenance organization (HMO)

  • Pay higher premiums with a lower deductible
  • Restricted network of providers with lower premiums
  • You want to choose a primary care physician
  • You don't mind getting a referral
  • You don't care about the ability to get out-of-network care
Health maintenance organization (HMO) plans have lower premiums than PPOs. However, HMOs have more restrictions. HMOs don't allow you to get care outside of your provider network. If you get out-of-network care, you'll likely have to pay for all of it. HMOs also require you to get primary care provider referrals to see specialists.
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High-deductible health plans (HDHPs)

  • Pay lower premiums with a higher deductible
High-deductible health plans (HDHPs) have become more common as employers look to reduce their health costs. HDHPs have lower premiums than PPOs and HMOs, but much higher deductibles. A deductible is what you have to pay for health care services before your health plan chips in money. Once you reach your deductible, the health plan pays a portion and you pay your share, which is called coinsurance.
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Exclusive provider organization (EPO)

  • Restricted network of providers with lower premiums
  • You don't want to choose a primary care physician
  • You don't want to get a referral
  • You don't care about the ability to get out-of-network care
Exclusive provider organization (EPO) plans offer the flexibility of a PPO with the restricted network found in an HMO. EPOs don't require that members get a referral to see a specialist. In that way, it's similar to a PPO. However, an EPO requires in-network care, which is like an HMO.
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Individual insurance/Affordable Care Act
The Affordable Care Act created insurance exchanges that allow people to compare plans. The health law also requires insurers to accept everyone and not charge them exorbitant rates. People who make below 400% of the federal poverty level qualify for subsidies to help pay for an ACA plan.
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To find the kind of ACA plan for you, would you rather...
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Individual insurance/Affordable Care Act
The Affordable Care Act created insurance exchanges that allow people to compare plans. The health law also requires insurers to accept everyone and not charge them exorbitant rates. People who make below 400% of the federal poverty level qualify for subsidies to help pay for an ACA plan.
Know more individual insurance / ACA
People who would prefer to pay lower premiums with a higher deductible may want the below plans
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silver shield

Silver is the second most popular plan in the ACA exchanges, with 35% of people with a Silver plan. Silver has lower premiums than any plan except for Bronze. However, it has lower out-of-pocket costs than Bronze. Silver plans pick up 70% of the costs, while members pay 30% The average single coverage in a Silver plan is $481 monthly and $1,179 for a family plan.

Bronze is the most popular type of plan in the ACA exchanges, with 41% of members with a Bronze plan. These plans have the lowest premiums, but also the highest out-of-pocket costs in the exchanges. Bronze plans pick up 60% of the costs, while members pay 40%. The average single coverage monthly cost in a Bronze plan is $440 and $1,080 for a family plan.

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Individual insurance/Affordable Care Act
The Affordable Care Act created insurance exchanges that allow people to compare plans. The health law also requires insurers to accept everyone and not charge them exorbitant rates. People who make below 400% of the federal poverty level qualify for subsidies to help pay for an ACA plan.
Know more individual insurance / ACA
People who would prefer to pay higher premiums with a lower deductible may want the below plans
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platinum shield

Platinum plans have the highest premiums but the lowest out-of-pocket costs. So, you pay more for the coverage initially but less than other plans when you need health care services. Platinum plans pick up 90% of the costs, while members pay 10%, Not many health insurers offer Platinum plans. Only 2% of members in ACA plans have a Platinum plan, so you may have trouble finding one. The average monthly premiums for single coverage in a Platinum plan is $706 and the average family coverage costs $1,460.

Gold plans have lower premiums than Platinum, but higher premiums than Silver and Bronze. Gold also has lower out-of-pocket costs than Silver and Bronze, but higher than Platinum. Gold plans pick up 80% of the costs, while members pay 20%. The average monthly premium for a single Gold plan is $596. Family coverage averages $1,426 per month.

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How do I get cheap health insurance?

Regardless of how you shop for an affordable health insurance plan, you'll want to examine the numbers and make sure your doctors accept the plan. Otherwise, you may have to pay more or all of the costs for visits to those doctors.

Compare the premiums, copays, deductibles and out-of-pocket costs. Also, determine what costs are most important. Finally, ask yourself if you'd prefer lower premiums or lower out-of-pocket costs.

Michael Daugherty, vice president of sales at GetInsured, advises that very low-premium plans can have higher price tags because of out-of-pocket costs.

"Purchasing a plan with a low premium can be a pitfall if it ends up having a high deductible,” he says. “Also, short-term plans may appear to be cheap, but they only cover you in a catastrophic situation and generally exclude expenses that may result from pre-existing conditions. It's important to buy health insurance from a reputable, qualified broker who can explain your options and tell you what the real cost of a health insurance plan is."

Deborah Gordon, author of "The Healthcare Consumer's Manifesto: How to Get the Most for Your Money," says the best plan depends on your specific circumstances.

"If you don't expect to need a lot of healthcare services, that trade-off may work out well for you,” Gordon explains “But, if you're worried about unanticipated expenses or wouldn't be able to handle medical bills, consider a plan that protects you a little better."